To make money from forex is simple but not easy.
One must have:
1. Workable trading system
2. Discipline to follow system
3. Capital and monitoring time as required by the trading system

By Trading System, it means to have the following:
1. Defined signal for entry
2. Defined signal for exit
3. Defined average accuracy
4. Defined risk reward ratio
5. Defined timeframe to use

This trading system should be:
1. Backtested for reliability
2. Forward test (Demo) to ensure take into account of realtime movements
3. Forward test (Live) to ensure suitability to the user, ie monitoring needs, preference etc.

Further notes on Trading System:
1. Workable system is not one with high accuracy but low risk reward ratio or one with low accuracy but with high risk reward ratio.
2. High accuracy but low risk reward ratio may result in many small winnings but one big loss which wipes out all the winnings.
3. Low accuracy but with big risk reward ratio is akin to the Big Sweep - RM3 for RM3 mil
4. It is a balance between the accuracy and risk reward ratio. Alternative view of it may be:
Accuracy x Average Winnings = System's Reliability

20 pips or 200 pips stop is dependent on the trading system and money management.
By this, it means a balance needs to be striked between-
1. Capital
2. Lot size
3. Volatility of the timeframe of the instrument traded

In general, there are two types of methods:-
1. Trend trading
2. Range trading

Trend trading depends on the collective movement of prices in one direction.
Range trading depends on the sideway movement of bouncing off support and bursting at resistance.

Market trends 20% of the time, making 80% of the moves; whilst
it tends to be ranging 80% of the time with 20% of the moves.
This is a general guide, in line with the pareto 80-20 concept. Different instrument may have different percentages. Prior to trading the instrument, it may be worth to conduct a study on the past behaviour.
Note: Sufficient data should be obtained to ensure that the myopic conclusion is not derived.

Ultimately, trading success is dependent on:
1. Workable trading system
2. Discipline to follow all requirements of the system including monitoring time, provision of capital etc.

Hence, it is that simple. But only definitely not easy.
The notes above are only illustrations of what needs to be done. I might have missed out much more

history tells me. everythings always look nice on paper. in reality, there gonna b at times where we forgot. d onli way to survive is :
1. like jessi livermore, shoot urself dead.
2. b like w.d. gann / those hoola boola u saw in advertisement. selling their strategy in newspaper / seminars.
3. b an average joe. get a life. get a permenant job.trade for side income / money u can lose.

edited: typo

This post has been edited by low yat 82: Feb 20 2011, 09:27 AM

In any fields of excellence, most dont make it.
Yes, at some point, one has to choose between the idea of being great or being average.
As Benjamin Disreali would say, "Life is too short to be little"

Have a good weekend!

i am back with less capital but new rules to myself.. hope i can stick to it... no emotion.. no emotion

Good luck! Happy trading!

near-term Aud/usd trend remains up..base channel support lines must hold

Anybody online?help me out plz....is GU,NU n AU bearish rite now?using fxcm mobile,reading not quite rite...
My heart goes out to d ppl on NZ... ...no wonder d bearish mode for NU

This post has been edited by shajack: Feb 22 2011, 10:01 AM

Ya, bearish now..longing EU now..

long???

Yeah, a buy order..

It is a large snowball just rolled during Asian, I dont think it will stop that easily.

One massive snowball. Hahaha.. Anyone traded earlier as well?

UJ short,NU short,EU short...tho last week's trade...all closed tis morning

same here

EU's long term trend is on the south side, you'll see triple tail on weekly chart.
the Friday's gain is totally due to news move, 160pips up.....so it should continue south this week.

noticed and learning that. thank you... but emotion is killing so does my capital with the 160 up...

These large moves is tempting .. if ur late for the train dont chase it. wait for retracement and valid signal from ur trade system.

updated ..

successfully closed all opening trading for this month

except for EU ...still bearish ...and i'm still hold that red pips

Hey all sifus, im wondering where can i get a coach to teach me in forex in malaysia. i read about forex in forum and books but i still don' understand it, i need a coach to guide me. Anyone knows?

stop trade for few seconds a while. n silence in remembrance of d earthquake dat takes lots of live in new zealand. RIP. amen..

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Added on February 22, 2011, 6:36 pmso do u get it? ur major risk is ur emotions rather than pips (minor risk). how to reduce major risk? it depends.. some people use EA. n some people use time to define as major risk coz emotion invovle higher when d longer u stay in trade, but this is usefull if ur tradin tactics correct 90-100%

This post has been edited by low yat 82: Feb 22 2011, 06:36 PM